ITC's success: A unique brand building experience

Putting those numbers in context is a IMRB household panel survey in February 2010 that indicates Vivel and Superia soaps and shampoos have been purchased by over seven crore households, representing nearly 30 per cent of Indian households.

What helped ITC cut across the clutter is probably its product proposition: a wide range of products meeting international quality standards but developed on the basis of Indian consumer experience.

Of course, chief executive of personal care strategic business unit, Sandeep Kaul, believes it's not one selling proposition, but several that have helped ITC carve out a place in the market.

ITC's success: A unique brand building experience

"We offer a superior value proposition to the consumer and we have an intimate understanding of consumer insight. And, of course, the aesthetics. These are the cornerstones of our value proposition," Kaul says.

No doubt. At ITC, there is a lot that goes into understanding the consumer. The company spent close to four years researching at its centre in Bangalore before the first product from the personal care stable rolled out.

"That is why our products have been accepted by the consumer. We probably have the fastest growing set of brands in the market," Kaul points out before adding rather modestly that the base is also small.

ITC's success: A unique brand building experience

ITC's non-cigarette fast moving consumer goods (FMCG) business - which contributes close to 50 per cent to the company's turnover - registered a strong set of numbers in the third quarter of 2011 and among the highlights was a continued reduction in loss reported by the FMCG business.

While revenues increased 23.8 per cent year-on-year to Rs 1,104 crore, losses came down by Rs 12 crore to Rs 74 crore, though sequentially it increased due to new launches.

Angel Broking Research expects the revenue traction in the segment to continue and loss to reduce albeit at a slower pace than FY2010, though breakeven is likely to be achieved only in FY2013.

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Image: FMCG business contributes close to 50 per cent to the turnover.

ITC's success: A unique brand building experience

Engagement with consumers, promotional activities and new age consumer connect avenues have had their roles to play, but it is the relentless rollout of products that has given ITC's FMCG portfolio so much visibility.

In a short span of time, ITC has managed to create a presence across different price points, almost bombarding the market with launches.

In the super premium segment, it has Essenza Di Wills fragrances, in premium Fiama Di Wills, in the mid-market segment Vivel and in the popular segment Superia. There is a segment below the popular, but ITC is not present at that price band.

ITC's success: A unique brand building experience

While the company has kept its fragrances small, it gives ITC's FMCG portfolio a prestige value, priced as they are on par with international designer fragrances. "It is doing very well, considering that the distribution has been kept limited. We would like to keep it that way. We need a particular ambience for the brand to be presented," Kaul points out.

Launch pad

"Our track record in launching new products has been pretty excellent," Kaul says. That's putting it mildly. The personal care business of ITC has gained ground leveraging investments in R&D, product development and brand building.

The company made a foray into the fast-growing and relatively under-penetrated domestic skin care market with the launch of Vivel Active Fair Cream (the fairness cream market is estimated at Rs 1,900 crore) in June 2010. The product has been well received in the launch markets and is being progressively rolled out to target markets.

ITC's success: A unique brand building experience

The business expanded its product portfolio in the soaps category with the launch of Vivel Glycerine Milk Cream, a new offering in the winter segment.

Vivel Deo Spirit, its offering in the freshness segment, was extended to Andhra Pradesh, Kerala and Karnataka last winter.

The anti-hair fall shampoo variant under the Fiama Di Wills brand launched in September 2010 has also been successful, says the company.

Recently, ITC entered the men's grooming segment with the Aqua Pulse shower gel and soap. "We are progressively seeing a trend, wherein men are beginning to look for value propositions and products created keeping them in mind. People are becoming more and more discerning," Kaul explains.

ITC's success: A unique brand building experience

The business is investing in building a strong portfolio of products and brands through well-defined research and development strategies backed by the company's state-of-the-art R&D centre.

It is also continuously enhancing the quality of engagement with consumers through efficient deployment of media, direct contact and promotional activities across conventional and new age consumer connect avenues.

The business continues to leverage investments in manufacturing facilities at Haridwar (Uttarakhand) and Manpura (Himachal Pradesh). Apart from the fiscal benefits that accrue on such investments, these facilities also provide a higher degree of flexibility in manufacturing.

ITC's success: A unique brand building experience

"We are in the process of rolling out products in categories where we have already entered. That process will go on," he says. Peer companies believe Kaul.

"We respect them as a company with good financial capability, distribution and management," Emami director, Harsh Agarwal says. In a market as big as Rs 29,000 crore, there is possibly space for many players.

In all these launches ITC has followed the top-down approach that has given it tremendous success in its lifestyle retailing and the stationery segment foray as well as its food business.

ITC's success: A unique brand building experience

ITC stepped into lifestyle and the stationery segments about a decade ago with premium Paperkraft notebooks and Wills Sport apparel.

It's only much later that it introduced mass market brands Classmate notebooks and John Players menswear.

Then in 2001 ITC entered the food business with premium ready-to-eat brand Kitchens of India and followed it up in 2003 with the launch of the Aashirvaad range of ready meals in the Rs 35-50 price band.

ITC's success: A unique brand building experience

A growing demand would necessarily require capacity augmentation. ITC responded to the needs by adding capacity at its plant at Haridwar in Uttarakhand and commissioned a new plant at Manpura in Himachal Pradesh sometime back.

"We are in the mode of expanding capacity but probably in the same locations. It's an ongoing process as we continue to invest in newer forms of technology," Kaul says.

Is inorganic expansion an option? "We are always open to options of inorganic growth.

However, we will be able to do or get into inorganic growth only if we believe that we can create more value than existing handlers of the asset. Given the market construct in India, there are not many opportunities that are available for acquisition," Kaul explains the ITC philosophy.

ITC's success: A unique brand building experience

Three products have been voted as consumer's choice in a Nielsen survey. Kaul would like to see more such milestones. "Winning consumer affection is our priority number one. We have been meeting our expectations," Kaul says proudly.

The company doesn't want to share the targets, but Angel Broking says, while cigarettes will continue to remain the main profit centre, investments in non-cigarette businesses have started yielding positive results, many of which are just about a decade old in the 100 years of the company's existence.

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Image: Investments in non-cigarette businesses have started yielding positive results.

ITC's success: A unique brand building experience

"We expect non-cigarette earnings before interest and taxes to post a 35 per cent compound annual growth rate aided by reduction in non-cigarette FMCG losses, improvement in hotel margins aided by higher average room rate and higher margins in paperboards," a recent report from the broking house notes.

At the last annual general meeting, ITC chairman YC Deveshwar had said that the investment opportunity for ITC in the FMCG business - cigarette and non-cigarette - over the next seven to 10 years was likely to be Rs 8,000 crore.

With the frenetic rollout of products, it would be safe to assume that the personal care business would get a significant chunk of that.

ITC's success: A unique brand building experience

ITC's personal care portfolio is designed to appeal a cross-section of consumers with its differentiated value propositions.

Essenza Di Wills is a range of super premium offerings which includes fragrances and bath and body care products with distinctive olfactory profiles.

The brand aims to offer "a balance between the classical and the contemporary" with offerings for both men and women. Essenza Di Wills deodorant is priced at Rs 475 and the perfumes upwards of Rs 1,800.

Fiama Di Wills is a range of bath care products especially designed for consumers who seek to indulge themselves in premium experiences through products and services.

The brand offers a range of shampoos, conditioners, soaps and shower gels that combine exotic natural elements like sage, watercress and magnolia blossoms with contemporary technology like hydro restorative system, hair restore technology and the cuticle restore technology. The products are priced between Rs 33 and Rs 120.

ITC's success: A unique brand building experience

The Vivel range of products launched in 2008 is ITC's leading personal care brand and has emerged as one of the fastest growing brands nationally. The brand offers a range of bath care and skin cream products in the mid-market segment.

The Vivel portfolio comprises soaps with actipro-N, one with double moisturisers, Vivel Milk Cream & Glycerine Soap, as well as the first soap targeted the youth, Vivel Deo Spirit.

In shampoos, Vivel has two variants - Total Care and Ultra Pro Anti-Dandruff shampoo. Vivel expanded its portfolio with the launch of ITC's first fairness cream, Vivel Active Fair which promises a lightened skin in just seven days. The products are priced between Rs 5 (soaps) and Rs 129 (shampoos).

The Superia range comprises soaps and shampoos aimed at the value consumer. The products are priced between Rs 5 and Rs 52.

The Vivel Active Fair within months of its launch received extremely encouraging consumer response. The brand, in a special initiative for consumers in Kerala, gave young women an opportunity to be the next gorgeous face of the Malayalam film industry. Reputed Malayalam director Lal Jose was roped in for the selection process.

ITC's success: A unique brand building experience

The contest offers consumers an opportunity to win Rs 5 lakh on completion of a simple slogan 'Vivel should make your dream come true because...' and along with it, send any three Vivel soap wrappers/cartons to a mailing address.

The first couple of Vivel Lakshadhikaris were announced recently and felicitated by brand ambassador and Tamil actor Trisha Krishnan.

Superia recently announced its 'Superia Saundarya Sakhi' initiative in Uttar Pradesh. It is an initiative to enhance skills of women entrepreneurs in the business of beauty across the state of Uttar Pradesh. As a part of this initiative, Superia will reach out to 4,000 beauty parlour owners in more than 30 districts of Uttar Pradesh.

Superia has also announced the 'Superia Chamakta Sitara' campaign in Uttar Pradesh. The contest, in association with schools across 29 districts of Uttar Pradesh, aims to recognise all-round development among students.

Students from grade 7 to 12 will compete to become the 'Superia Chamakta Sitaras'. These students will be judged on the parameters of grooming, attendance, academics and extracurricular activities. The campaign will reach out to more than 1,000 schools.